Who Controls Grain Handling?

[chaffmeister]

Agstar77: Don’t take my word for it – as Vader says, do your own research.

On grain handling tariffs and charges: my points were made based on my knowledge of the industry – you could ask people in the grain business for their thoughts. My point here was that Vader’s comments were misleading (perhaps misinformed) and seemed designed to make people afraid of changing the role of the CWB.

On CWB investment in ethanol plants: just my opinion here, but hopefully based in rational thought. Do you see a role for the CWB? Couldn’t farmers do this on their own? The fact that the CWB got in the way of the pasta initiative is well documented – check old copies of The Western Producer.

On the Auditor General’s Report: Go to http://www.cwb.ca/en/topics/performance/auditor_general.jsp (See paragraph 1 of the Executive Summary on Page 1.)

Dr. Gray’s Benchmarking Study is no longer available through the CWB’s website or on the U of S website. Alternatively, you could check the analysis of Gray’s methodology done by Sparks Companies Inc:
http://www1.agric.gov.ab.ca/$department/deptdocs.nsf/all/agc6751?opendocument

On my questions about sales comparisons: really, these are just questions, no opinions, no analysis (no “proof” required). I guess I do refer to a few “facts” such as the grain companies wanting to tender for this grain so they could pass on premiums to producers. On that, suggest you simply check around.

On the rest you can take my word for it or not – it really doesn’t matter to me. But it seems to me that the CWB’s answers to my questions are much more important than the questions themselves – or my credentials.

[agstar77]

You are right parsley it really doesn't matter who we get paid by as long as it is the highest price possible. Then again a lot of the arguments anti-CWB people have used has been based on the freedom to choose rather than returns. The way things are now there is little hope that either system will sustain the number of farms we have now. As for value added, the cattle producers have a chance to do their own thing and process their own beef. They are having a very hard time doing it even with government help. It's not likely that grain farmers could band together on their own to set an ethanol plant or would that necessarily be a good thing. The size of ethanol plants could be a little too large. Bio-diesel might be more attractive. I think we have rationalize why we are growing food crops to make bio-diesel or ethanol.

[parsley]

agstar77

"Then again a lot of the arguments anti-CWB people have used has been based on the freedom to choose rather than returns"

We only grow crops to make money and pay our bills. Update the computer. Have a beer. Take a trip. (next guy wants text-messaging, good scotch and fishing at the local lake). That's what makes a good life. Freedom to choose.

And my personal experience has been that with the freedom to choose, there are more choices available to me. I can shop around at the local feedlot. All over Canada. All over the world.

And with more choices available, there can be that perfect choice for me, that is a good match with my buyer. We are made for each other.


Can you see farmers in the future, banding together, with websites, entering in what you want to sell, plus the price you need to make ends meet with some profit built in, with the logistics there, for price discovery for all? Big loads pooled together and sold online every day.

With transportation details, protein details, traceability details,etc. right at the Enter key.

Buyer and seller undisturbed, from our single desks.

Could you function like that,agstar?

Parsley

[agstar77]

Maybe farmers could but I doubt that the railways and grain companies would go along with this idea. They have a lot of money invested in the system and they make their profits from integration. Your idea will probably make sense when two three farm conglomerates control the production, and that day is not far off.

[parsley]

What about pricing the grain FOB farm? Transportation is then offloaded on the buyer.

Parsley

[agstar77]

I have already told all that will listen that grain should be buyer or end user ready before it leaves the farm. Grain should be graded and marked. It could go directly to a loading facility not a traditional elevator.

[parsley]

eBay has been phenomonally successful on their online transactions.

Parsley

[Pulseman]

Hello All,

Not much has been said to "Who controls grain handling".

Is ist not so, that the 'acredited companies' handle the grain? The CWB controls the sale and the CGC handles the quality and that the companies are bonded. The CWB sells much of our grain to the 'acredited' and they slam $10-20 on once purchased from the CWB, making the handling plus the 10-20. With that the can give in the finanial statments, that no money is and can be made from farmers grain, but from inputs and the 10-20 go through a special speculative account.

Let's see, if Harper holds to his promise and get's done with one canadian meggot.

I have no fear to meet the world on their terms, rather then the meggot terms.

[chaffmeister]

If the Accredited Exporter (AE) can slam $10-20 on top of the price the CWB sells at, the CWB ain't getting no premium, right? FYI - AE’s can’t squeeze those kind of back-to-back margins out of CWB business. Also - grain trading revenues show up under marketing, trading, or something like that (not “a special speculative account”) and certainly not as elevation.

The grain companies manage their assets as profit maximizers (as they should) to the best of their ability given the challenges of having two fundamentally different logistics systems – the CWB system (a passive system using contract calls with very large delivery windows, price is not used at all as an incentive or disincentive to deliver) and the non-CWB system (a proactive system using price as the incentive/disincentive to deliver into very specific delivery windows, to optimally manage space). They manage their non-CWB programs in such a manner so as not to interfere with the CWB program about which they know less than they should.

The CWB manages its logistics using the grain handling system as a cost minimizer (as it should). The relationship with the grain handlers is not optimal as the grain companies see the CWB as a belligerent customer – they’d love to be able to do their job for the CWB without the CWB meddling and trying to manage the assets; the CWB sees the grain handlers as greedy service providers, some of which are also competitors; bottom line is the CWB doesn’t trust them which gets in the way of valid communications regarding sales programs and the like.

Bottom line – the system is dysfunctional.